Sports Business

Sports Business 15 to Watch: Baseball's impact on Cuba


Sports Business 15 to Watch: Baseball's impact on Cuba

1. Sometimes sports are more than just a game, and that was the case last week in Havana. With President Obama and Cuban President Raul Castro sitting next to each other, the Tampa Bay Rays beat the Cuban national team 4-1. This game marked one of the biggest exhibition matches ever in sport because of where it was played. Former MLBer Derek Jeter, Hall of Famer Dave Winfield, and MLB Commissioner Rob Manfred were in attendance, and U.S. Secretary of State John Kerry sat in the VIP box with several of Cuba’s highest officials, according to the AP. Cuban-born MLB players expressed hope that the game would usher in much-needed change in the country. Said Marlins pitcher Jose Fernandez, "Hopefully this is the beginning of change...It gives you some hope when things like this happen and you see the President over there now." The Cuban exhibition gives MLB momentum heading into a new season in which the Chicago Cubs are favored to win the World Series.

2. Cowboys Owner Jerry Jones is known to speak his mind, and his comments at last week’s NFL owners’ meeting disavowing a link between football and CTE were quick to make headlines. When Jones was asked if there is enough data to establish a connection between CTE and playing football, he replied, “No, that's absurd. There is no data that in any way creates a knowledge. There is no way you could make a comment there is an association." Jones’ remarks came in the wake of Jeff Miller, the NFL’s Senior Vice President/Health & Safety Policy acknowledging before Congress a link between CTE and playing football. While Jones would not say that he explicitly disagreed with Miller, other NFL owners took a more neutral stance. Jets Owner Woody Johnson said, "Whether I agree with (Miller’s) statement or not, I’ll leave that to the neurologists, the PhD’s, the people who really understand the causation. We want to make the game as safe as we possibly can."

3. Despite below average attendance for the first two rounds of the NCAA women’s basketball tournament, officials remain optimistic that those numbers will pick up. According to the Associated Press, the women’s 16 first round sites "drew an average of 4,464 fans, about 250 less than the previous year." However, 10 sessions drew a crowd of over 5,000 fans. Unlike the men’s bracket, the women’s tournament hosts its first few rounds at the home court of top seeds. The University of South Carolina “led the nation in attendance” throughout the season, and the first two rounds “were no different.” averaging "just over 10,000 fans" at Colonial Life Arena. But top seed UConn’s numbers weren’t as high as expected in the past. However, with regionals set in Dallas, Sioux Falls, Lexington, and Bridgeport, Connecticut, it is likely the women’s numbers will increase in the later rounds.

4. With the St. Louis Rams moving to Los Angeles, you might expect a total team rebranding. But that process is far from easy. Fans have expressed interest in seeing the Rams go back to their old L.A. colors, but Rams COO Kevin Demoff points out that the NFL "requires teams to submit permission to overhaul uniforms between January and March of a given year for implementation two years after that." The Rams would not apply for a change until 2017, meaning implementation would come in 2019 at the earliest. Under league rules, the team can wear throwback uniforms for two home games and so-called “color rush” uniforms for a Thursday Night Football game. Demoff remarked, “I don't particularly love our current uniforms – I know there are a lot of fans who feel that way. But the thing that makes the most sense is to keep [the uniforms] in place for now."

5. Collegiate conference TV networks are supposed to provide stability, mostly via a substantive revenue stream. Yet Oklahoma State University football coach Mike Gundy lashed out at the University of Texas and its Longhorn Network (LHN), citing it as one of the factors in the Big 12 conference’s increasing instability. Texas has its own network, but the Big 12 does not. Elsewhere, the SEC Network and Big Ten Network have had tremendous success. Eliminating the LHN and creating a conference-wide Big 12 Network would clearly give the Big 12 more national exposure. Yet despite losing $48 million since its 2011 launch, LHN partners ESPN and Texas "seem committed" to the 20-year, $295 million agreement that would pay the school an average of $15 million per year. University of Oklahoma President David Boren took Gundy’s comments a step further, boldly stating that if Texas doesn't fold LHN in X number of years, Oklahoma is moving to the Pac-12 or SEC.

6. In a jump of more than 20% over its previous year’s number, Nike earned $950 million in Q3 of 2015. This impressive marker comes in at nearly $100 million “more than analysts’ consensus expectation,” according to the Portland Oregonian. Last year, Nike declared its ambitious goal to reach $50 billion in annual sales by 2020. While that goal is still lofty, spikes in earnings like the Q3 numbers give the company hope of reaching its target in a few years. Nike CEO Mark Parker said that the strong quarter "reflected the company's 'complete offense' of strong and diverse products across multiple categories and continents." Parker added,"strong consumer reaction to recent product releases sets the stage for continued growth." By expanding its e-commerce offerings and logging stronger sales in China, for example, Nike has been able to increase its bottom line.

7. NFL owners have agreed to two temporary, yet significant rule changes to be implemented this upcoming season. The first will move the spot of the first snap after a touchback from the 20-yardline to the 25-yardline; the rationale behind this rule revolves around the hope of shorter kicks, resulting in fewer injuries to kick returners and blockers. The second rule change will eject a player “who is penalized twice in one game for certain types of unsportsmanlike conduct fouls,” according to Both rules will be one-year experiments – their effectiveness will be evaluated on a constant basis throughout the upcoming season and a revote to make them either permanent or dropped will happen the following year. Despite many NFL coaches lobbying against these rule changes, owners supported them in order to improve player safety as the league faces continuing concerns regarding concussions and other serious injuries. 

8. With a landslide vote of 113-25, the New York State Assembly legalized MAA, making the state “the last to allow the sport some critics feel is too violent,” according to Newsday. The vote overturns a ban implemented in 1997; bouts will be regulated by the New York Athletic Commission. The legislation passed through four committees before reaching the Assembly floor, and now goes to Governor Andrew Cuomo “for his consideration.” UFC Co-Chair & CEO Lorenzo Fertitta voiced his excitement, saying, "New York is the biggest market in the United States for us already, from a pay-per-view standpoint. We’re looking to literally break the gate records at each arena we go to, and that includes Madison Square Garden when we eventually get there, hopefully by the fourth quarter this year." The vote marked the culmination of a seven-year effort by UFC officials to operate in New York.

9. The NHL and NHLPA recently signed eight new deals for the World Cup of Hockey, adding to an already-impressive slate of 10 sponsorships. The tournament, to be played September 17-October 1 at Air Canada Centre in Toronto, will feature Air Canada, Canadian Tire, Honda, Molson Coors, PepsiCo, Scotiabank, Tim Hortons, Visa, Adidas, and Rogers Communications as official partners. Per terms of the deal, partners will receive in-venue signage, media integration, IP rights, collective and individual use of team marks, and group player use. While the tournament is still looking to add more non-Canadian partners, the NHL does not convey a sense of urgency about that issue. The NHL and NHLPA are also set to announce that Scotiabank will be the title sponsor of the World Cup of Hockey Fan Village, a free festival in Toronto that will allow fans to interact with the food, music, and culture from all participating nations.

10. With spring training well underway in Arizona and Florida, MLB teams have begun launching ad campaigns in anticipation of the upcoming season. In Chicago, the Cubs launched their “North Siders’ 2016” campaign featuring Kris Bryant and Addison Russell in order to “help fans get to know the team’s star players,” according to Crain’s Chicago Business. For the second year in a row, “#LetsGO” will remain the overarching tagline for the Cubs marketing effort, but the team, “is incorporating new theme lines into this year’s campaign – most especially ‘All for Won.'" Meanwhile in San Francisco, two Oakland A’s players helped script the team’s TV ads that will roll out this season. Catcher Stephen Vogt and Pitcher Sean Doolittle suggested and partially scripted two ads for the club. A highlight of the ads is the two performing interpretive dance, among other comedic stunts.

11. In the wake of terrorist attacks in Paris that killed 130 people, UEFA Executive Committee VP Giancarlo Abete raised the possibility of some of Euro 2016’s matches being played in empty stadiums due to safety concerns. However, UEFA has since denied any chance of this actually happening. The European soccer organizing body released a statement saying, “We are confident that all security measures will be in place…However, we are nevertheless working on contingency plans and on multiple scenarios around crisis situations since we take the security of all participants very seriously." It will be interesting to see how last week’s attack in Brussels plays into this scenario, as UEFA issued this statement before Europe’s economic and political capital was attacked by ISIS terrorists. The Belgian national soccer team quickly cancelled training sessions after the attacks, but that move was only temporary and precautionary.

12. While the Rams are moving to Southern California, the Chargers or Raiders can still join the party. According to the L.A. Times, the Chargers have a “one-year option to be the second L.A. team,” but if they were to pass on this, the opportunity would roll over to the Raiders. Oakland currently has no concrete plans to build a new stadium, although they really need one. Raiders Owner Mark Davis commented. "There's nothing new in Oakland,” he said. “There's really no place for us to build a stadium right now. That's the biggest problem up there." The Chargers are trying to build a new stadium in San Diego, but are keeping open the possibility of joining the Rams in L.A. if their local efforts fail. If the Chargers were to move to L.A., the Raiders could actually move to San Diego; Las Vegas and San Antonio may be in the mix for them as well.

13. JPMorgan Chase, America’s biggest bank, is making another big deposit in the Bay Area. In January, the bank landed the naming rights to the Golden State Warriors’ new arena for a record-setting $15-20 million per year over 20 years. Now it just signed NBA superstar Stephen Curry to a multiyear endorsement deal. Chase plans to "use Curry as part of the bank's 'Mastery' campaign" that launched last year. Ads with Curry "are expected to debut in the spring/early summer,” according to Forbes. Curry’s deal with Chase is expected to exceed $2 million annually. With the new endorsement under his wing, Curry’s endorsement roster includes Chase, Brita, Under Armour, Kaiser Permanente, Unilever’s Degree, JBL, Muscle Milk, and Fanatics. All of these deals combined are expected to rack in around $12 million annually off the court.

14. The X Games are leaving Austin, Texas, a year early in order to find a less competitive season for the action sports festival. ESPN currently has a four-year contract to host the event in Austin through 2017, but the network has made it clear that 2016 will be Austin’s final year playing host. Since coming to Austin, the X Games have been held in early July to avoid the late-summer Texas heat, but this move has forced them to compete for valuable airtime with late rounds of the NBA and NHL playoffs, Memorial Day weekend auto races, and other events. Bidding is now open for the rights to host the 2017-2018 games; cities expressing interest include Ft. Lauderdale, Kansas City, Minneapolis, Nassau County, New York, Portland, and Seattle. ESPN Vice President Tim Reed said that cities could potentially host X Games events in air conditioning, but the bids will be evaluated on venue and facilities capabilities, a “brand fit” with a city and the market’s demographics.

15. Way too often, life is Man vs. Machine. We find ourselves battling lawn mowers, toasters, and smoke alarms – those, usually, at 3:00 am. But now that spring has arrived, what if a machine could fix your golf game? Meet the RoboGolfPro. Resembling a Star Wars droid, the RoboGolf Pro uses a series of computer-controlled pistons to help groove your golf swing. Supervised by a PGA teaching pro, you grip a club attached to the robot, and the German-designed training machine guides you through the ideal arc of an effective backswing. Video analysis helps bring your swing plane into sync, and after numerous adjustments and repetitions, new muscle memory begins to kick in. Teaching sessions at locations like TourBound Golf Academy in Chicago and Dragonfly Golf Club in Madera, California where the robot is available to the public average $150, and PGA Tour pro Vaughn Taylor, who recently won at Pebble Beach, was so impressed with how RoboGolfPro helped his swing he bought one. (They run about $150,000.) Just call it Swingus ex Machina.


Why Cirque du Soleil, NFL experience could come to Chicago

Why Cirque du Soleil, NFL experience could come to Chicago

With the success of the NFL Draft going mobile, the league may eventually decide to take another NFL experience on the road.

The NFL has partnered up with Cirque du Soleil to launch an interactive exhibit in New York City this fall.

The attraction, titled NFL Experience Times Square, will include interactive screens, an auditorium for 4D shows, coaches clinics, autograph sessions and much more.

[BEARS TICKETS: Get your seats right here]

CSN Sports Business Insider Rick Horrow explains why taking the experience on the move could be a good thing for the franchise value of the Bears.

"This is an example of a $25 billion NFL business joint-venturing with another pioneer in the entertainment industry Cirque du Soleil to make it better," Horrow explained. "Here's the case, because the NFL Draft has become mobile with Chicago leading the way, then Philadelphia, the Pro Bowl, the Super Bowl, you can't believe it's not an opportunity for potentially doing this NFL experience along the streets of Madison Avenue, along State Street, as well as Michigan Avenue.

"How about downtown Chicago on the way to other places."

Watch the video above to see what else Horrow had to say about the NFL Experience possibly coming to Chicago.

Sports business: Using targeted promotions to earn more dollars

Sports business: Using targeted promotions to earn more dollars

In Monday's episode of National Public Radio’s (NPR) Fresh Air Joseph Turow, professor of communications and associate dean for graduate studies at the Annenberg School for Communication at the University of Pennsylvania, ominously "Warns That Brick-And-Mortar Stores Are Watching You."

While this may seem a bit like the real-life equivalent of "Big Brother" from George Orwell's book 1984, Turow is describing the reality that the tracking companies do in e-commerce has moved more fully into the offline stores. Using technology including mobile applications, iBeacons, loyalty cards, geo-targeting, and geo-fencing companies have more information about customers in-store buying and behavioral patterns. This enables companies to design targeted adds and promotions specifically tailored to customers that can increase the likelihood of them making a purchase.

While the ethical implications of this activity would require and entirely separate blog post, Turow and host Terry Gross discussed an important idea that comes from having this technology. In the past, companies have focused on rewarding and retaining loyal customers. Those are the customers that keep coming back and buying a company's products or service offerings. Because the cost of keeping a customer has been much lower than attracting a customer it would seem to make sense that companies would want to focus on keeping the customer's they have.

However, this may no longer be the optimal strategy for maximizing revenue growth. Instead, companies should be focused on the marginal customer rather than the most loyal customer. A loyal customer is loyal for a reason – he / she likes the company's service offerings. Why spend money on advertising and promotions if that person is already likely going to buy the product anyway?

Instead, targeted promotions should be focused on customers that will only make a purchase if they are influenced in the right way. For example, let's say a customer is indecisive about buying a pair of jeans. In the past, this customer may have tried a pair of jeans on and then left the store without purchasing them. Now, a customer can download a company's app to access additional content, deals, and other helpful information. In return for delivering these benefits the company can receive information from the app that shows the location of the person while he/she is in a store. It can then use a geo-fence, a virtual fence that surrounds a geographic area, to determine when a customer leaves a specific geographic area. If this customer leaves the store without making purchase after spending a certain amount of time (i.e. the time to try on the jeans) then the company could send a targeted ad saying that the customer has 15 minutes to come back to purchase the jeans at a 15 percent discount. Essentially, companies now can identify "disloyal" customers and then attempt to bring them back to stores to make purchases.

Using technology to reward "disloyal" customers is something that sports organizations need to increasingly focus on given the demands of the business. More specifically, there are loyal fans that are going to buy tickets, watch games, and purchase merchandise even if they do not see any advertising from a team. These customers add significant value and should not be ignored. However, sports organizations want to focus on targeting the marginal customer using new technology to encourage ticket sales, in-venue purchases and increase game viewership.

The added benefit of using technology and customer outreach in this way is that it should increase sponsorship revenue as well. Not only can sports organizations use targeted promotions to help their current sponsors expand reach, but organizations can also show how these targeted marketing efforts cause lifts in purchasing. For sports teams, clearly communicating how sponsorship/marketing assets are used to create a lift in sales provides powerful evidence of how similar tactics can drive new revenue for partners. Rewarding "disloyalty" seems counter-intuitive, but there are many ways that targeting marginal customers should lead to substantial revenue growth.

Adam is the CEO and Founder of Block Six Analytics. He is also a lecturer for Northwestern University's Masters of Sports Administration and the co-author of The Sports Strategist: Developing Leaders For A High-Performance Industry.